In one of Bill Gates’ last interviews before he left Microsoft at the end of June, he said that a deal between Microsoft and Yahoo wasn’t likely to happen. He was speaking with Tom Brokaw of NBC news and was asked, “Do you think in a year from now, when you’re down at the foundation offices, you’ll look up at Microsoft and see Yahoo as a permanent wing of Microsoft, a part of it? Do you think the deal will get done?” Gates’ response was, “No, I don’t think so. But there are plenty of decisions ahead that Steve will get to make about what he invests in, R&D (research and development), and what kind of deals he does. I don’t think that one’s likely but there are plenty of others that will get done and I’ll look on with great respect.” (Source)

Just 10 days after Bill Gates made that statement, and Microsoft released an announcement saying in a nutshell, that they are still interested in Yahoo. The only condition influencing whether or not they will enter further discussions is “if” and only if a new board is elected. They were responding to talks they had with Carl Icahn about his plan to oust the Yahoo board and replace them with a new board. Icahn wrote a letter to Yahoo shareholders to let them know where he was at, and commented on the talks he’s had with Microsoft. At one point he said, “Jerry Yang and the current board of Yahoo will not be able to “botch up” a negotiation with Microsoft again, simply because they will not have the opportunity.”

We know that everybody is probably getting sick of this whole Microsoft-Yahoo saga, but over the next month or two is when it’s going to get really interesting. Now that Microsoft has confirmed that they still have Yahoo set in their sites, still, and we know that Yahoo’s annual shareholders meeting is scheduled for August 1st, something could definitely happen. Whether it would be a full acquisition or just a partial acquisition, we’re not sure yet, but if the board is replaced, some type of acquisition is likely.